In India obtaining the basic licenses, permits, tax registration for the government mandated guidelines for health, food safety policy, No Objection Certificate (NOC) from the fire department and the state pollution control board and others is, to most, barriers in the smooth operations of a restaurant in the city.
The licensing process is not centralised as yet and requires filing applications with individual stakeholders which involves a lot of paperwork and is very time-consuming. The licenses required to start a restaurant in India is more difficult than other countries like Turkey, Dubai, Hong Kong etc which requires only three to four licenses pointed restaurateurs who need to do regular follow ups with these government bodies.
“I truly understand that there are certain procedures, policies that needs to be changed, and we are trying hard to erase all such policies from Delhi when it comes to promotion and development of the city,” shared Kapil Mishra, Hon’ble Minister for Tourism, Delhi Government.
Restaurant businesses can really act as a significant contributor to increase tourism in Delhi. “As 80 per cent people who visit Dubai, actually go to Dubai Mall to eat food and experience their tourism,” pointed Riyaaz Amlani, President, NRAI. And another major trouble in the restaurant industry is sourcing liquor. Every player offering alcoholic beverages has to obtain a series of licenses to sell alcohol and also adhere to the prescribed permitted hours and eligible age limit etc.
The Licensing fees is estimated to be Rs 0.5-0.6 crore i.e. USD 0.10-0.12 million to fulfil all licensing requirements, which is a huge impediment for growth when considering a restaurant’s finances. In addition, the annual license fee to sell imported alcoholic beverage is as high as Rs 10 lakh or USD 19,230 per year in New Delhi plus processing charges.
Additionally, there are also many indirect taxes like customs duties, excise permits and additional fees like government education tax are levied on imports and especially on the import of alcohol. In addition, interest is also payable. Like a 150 per cent tariff levied on imported wine upon which the federal government imposes an Extra Additional Duty (EAD) of 4 per cent. In addition, each of India’s 28 states levy their own taxes on alcohol that range from 30 per cent to over 100 per cent.
Assuring restaurateurs of single window clearance and a ministry for the restaurant industry, Mishra implored not to pay any bribe to any of the government officials.